Leave travel allowance (lta) for director employees

Tax queries 1509 views 4 replies

Anupam

SWE

26 Points Joined April 2016

Reference: https://www.incometaxindia.gov.in/_layouts/15/dit/mobile/viewer.aspx?path=https://www.incometaxindia.gov.in/charts%20%20tables/list_of_benefits_available_to_a_salaried_person_final.htm&k=&IsDlg=0

LTA is taxable for Director Employees as per the above article. Is that true for A.Y 2019-2020 also? The article also says that employees with salary greater than Rs. 50,000/- will also have LTA as taxable.

Can any member here confirm if that is indeed the case?

Thanks and Regards.

Replies (4)

Kapadia Pravin

17264 Points Joined December 2018

LTA paid to specified Employees are TAXABLE

The following employees are deemed as specified employees:

1) A director-employee

2) An employee whose monetary income* under the salary exceeds Rs. 50,000

*Monetary Income means Income chargeable under the head salary but excluding perquisite value of all non-monetary perquisites

Suresh Thiyagarajan

Student

3986 Points Joined July 2018

1. Yes, from the AY 2020-21 Leave Travel Allowance (LTA) exemption u/s 10(5) will not be available to a specified employee who includes,
i) Directors
ii) an employee who has substantial interest (more than 20% voting power)
iii) an employee who has a salary more than Rs. 50,000 (excluding non - monetary value perks)
2. As per the above amendment, a director will be covered under the specified employee of the company and LTA provided to directors (any kind) will not be covered u/s 10(5) and thus it will form part of salary and will be taxable accordingly.
Please correct me if the above solution has an alternative view.